In Martin v Randall – Lawtel 22.10.07 the appellant appealed against a decision ordering him to pay the costs of the respondent in respect of a certain period. In May 2005 the respondent had made an offer underCPR Part 36. The appellant did not accept the offer and the respondent issued proceedings. A day before the trial of the action the appellant finally agreed the valuation made by the expert in a sum virtually identical to that made in the Part 36 offer. This meant that the sole issue for determination was a fraud allegation which, if made out, would have increased the sum payable to the respondent. The judge found that the respondent had not established fraud and that only the agreed payment was due to him. The judge therefore ordered that the appellant should pay the respondent's costs from May 2005, when the Part 36 offer had been made, until settlement the day before trial. The appellant contended that the judge had erred in ordering him to pay the respondent's costs for that period on the ground that he had been the successful party in the litigation as the respondent had failed to establish the fraud alleged.

The Court of Appeal held that, under CPR r.44.3(5), in deciding whether to make an order for costs the court had to have regard to all the circumstances including conduct before and during the proceedings, whether a party had succeeded on part of a case and whether there had been any offers of settlement. An appellate court's ability to interfere in the trial judge's discretion in that respect was constrained and would arise only where the judge had exceeded the generous ambit within which reasonable disagreement was possible. In this case it could not be said that the judge had made any error of principle in making the order for costs that he had.

Part 36 did not provide for a suspension of the 21-day time limit while an offeree investigated an offer. An offer having been made, the offeree had either to accept it within 21 days or risk the consequences. The sole error made by the judge had been concerning the effective date by which the appellant could have accepted the Part 36 offer, ie 21 days after it was made and the order would be amended accordingly.